Goldman's 5 Best Energy Stocks for 2011

Global demand for oil and gas is pushing up share prices, though volatility can take its toll.

Plains Exploration & Production ( PXP) earned a $36 price target worth a 13% premium at the time of Goldman Sachs' rating. The independent oil and gas company, with a market value of $4.6 billion, is engaged in acquiring, exploring and producing oil and gas fields predominantly in California, but also in Texas, Louisiana and the Gulf of Mexico.

Fourth-quarter earnings are due Feb. 24, and are estimated at 31 cents per share, which would bring 2010 earnings to $1.18 per share. For fiscal 2011, analysts estimate that earnings per share will increase 52% to $1.79.

Morningstar says the company is on a diversity kick and acquiring assets throughout the world.

"Not only has the firm managed to increase production more than 50% during this time, but it has also accumulated many other growth opportunities. All the while, the company has been able to improve its cost structure."